KX02, a lipophilic dual src/pretubulin inhibitor, was discovered and developed by Kinex Pharmaceuticals through their internal R&D efforts. It is a small molecule that has shown potent inhibitory activity against a broad panel of brain tumor cell lines, including cells (T98G) that are resistant to Temodar, the most widely used chemotherapy for the treatment of malignant glioma. In a well-established brain tumor animal model, KX02 has been shown to consistently clear brain tumors after 4 weeks of therapy in 30-60% of treated animals. Pharmacokinetic studies showed that KX02 is absorbed orally and has 76% penetration to brain tissue from plasma. Mechanistic studies showed that KX02 induced both surface and central necrosis of the glioma compared to Temodar which only induced surface necrosis. All preclinical studies, including toxicology studies in two animal species, essential for the filing of investigational new drug application (IND) to the US Food and Drug administration (FDA), have been completed. Kinex Pharmaceuticals is planning to file an IND in early third quarter of 2012 to initiate phase 1 clinical studies. The intellectual property of KX02 as a new chemical entity is protected by issued patents until February 2026.

The acquisition of rights to develop drugs in certain Asian territories is part of Xiangxue Pharmaceuticals overall business strategy to expand their small molecule franchise, including their effort to work on new drug development, into those regions that have intellectual property protection. This strategy is in line with the overall direction that is being encouraged by the Chinese government in order for Chinese Pharmaceutical companies to engage in new drug discovery and development.

This collaboration will allow Kinex Pharmaceuticals to access Xiangxue Pharmaceuticals experience in clinical research and will also allow access to a large population of patients with brain tumors, the intended indication for KX02. Developing medicine to help patients is the main objective for both Kinex and Xiangxue Pharmaceuticals.

Under the terms of the agreement, Xiangxue Pharmaceuticals will acquire the rights to the development and commercialization of KX02 for all oncology indications in greater China, including China, Hong Kong, Taiwan, and Singapore. Xiangxue Pharmaceuticals will assume all development responsibility and associated costs in the licensed territory and will collaborate with Kinex Pharmaceuticals during this process. Xiangxue Pharmaceuticals will provide Kinex Pharmaceuticals with an up-front payment, development milestone payments and royalties associated with product sales. Xiangxue will also make a strategic investment in Kinex equity. A joint development team will be established to foster this collaboration.

Mr. YongHui Wang, Chairman and CEO of Xiangxue Pharmaceuticals, states: "This collaboration is an important strategic decision for Xiangxue Pharmaceuticals and will facilitate the ability of our Company to further expand our small molecule pipeline portfolio. We were very impressed by the experience of the management team at Kinex Pharmaceuticals during our due diligence process. Xiangxue Pharmaceuticals will be able to contribute to the development of KX02 in China and we are excited to collaborate with the scientific team of Kinex Pharmaceutical and to explore the potential synergy in the overall development of KX02 for patients with brain tumors. This strategic relationship will create significant value for both companies."

Xiangxue Pharmaceuticals is one of the leading pharmaceutical companies in China and has established a strong Research and Development team that is focused on the field of oncology.

"We are delighted to have the opportunity to collaborate with Xiangxue Pharmaceuticals to develop KX02. We are impressed by the high scientific standards of their research team and advisors, as well as the management team's strong commitment to research and development. Kinex will benefit from the scientific and local experience of Xiangxue Pharmaceuticals in the global development of KX02," states Johnson Yiu-Nam Lau, MD, FRCP, Chairman and CEO of Kinex Pharmaceuticals, who was former Chairman and CEO of Ribapharm, a publicly traded company previously listed in the New York Stock Exchange.

"The collaboration with Xiangxue Pharmaceuticals will allow us to accelerate the clinical development of KX02. I am delighted to have the opportunity to work closely with their clinical development team." stated Chief Medical Officer of Kinex Pharmaceuticals, Dr. Rudolf Kwan, who was previously Vice-President of Clinical Research, at Schering-Plough Research Institute.

About Kinex Pharmaceuticals, LLC

Kinex Pharmaceuticals, headquartered in Buffalo, New York, USA, is using its proprietary technologies Mimetica and Opal to discover and develop novel drugs for oncology and immuno-modulatory diseases. Through a licensing and collaborative agreement, Kinex is also developing products based on the Orascovery technology platform initially developed by Hanmi Pharmaceuticals. More information on Kinex Pharmaceuticals can be found at www.kinexpharma.com

Under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, Kinex Pharmaceuticals cautions investors that any forward-looking statements or projections made by Kinex Pharmaceuticals, including those made in this announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected.

About Xiangxue Pharmaceuticals, Co., Ltd

Guangzhou Xiangxue Pharmaceutical Co., Ltd (XPH) is a publicly traded pharmaceutical company headquartered in Guangzhou, China. The primary business of the Company is the manufacturing and marketing of pharmaceutical products, including herbal medicines, western medicines and biomedical engineering products. The company is actively expanding its product pipeline through research and development efforts and through in-licensing in areas of unmet medical needs. More information on XPH can be found at www.xphcn.com.